In a recent judgment, a Milan Court rejected a claim for the loss of value of a sculpture loaned by an Italian public entity to a Belgian museum arising from the alleged damage caused by a fall of the sculpture whilst on loan to the Belgian museum. The judgment is a reminder that in the absence of a detailed condition report, the alleged damage can be difficult to prove. The judgment also points to the difficulty in assessing the loss of value where, as a matter of law, an artwork belonging to the State is incapable of being traded on the open market.

In April 2003, the Italian Ministry of Foreign Affairs requested from the Comune of Milan a loan of several artworks in the Comune’s collection for an exhibition on Italian Futurism planned at the Museum of Ixelles (Belgium) to celebrate the Italian Presidency of the EU Council. The Comune of Milan agreed to make the loan which included a bronze sculpture by Umberto Boccioni known as ‘Forme uniche della continutà nello spazio’. During the exhibition, an employee of the Museum of Ixelles hit the support of the sculpture with a trolley. The sculpture fell and suffered damage.

In March 2011, the Comune of Milan started legal proceedings in the Milan Courts against the Museum of Ixelles and the Italian Ministry of Foreign Affairs. The Comune alleged that the fall led to the sculpture incurring significant damage, in turn causing the sculpture to lose value in the sum of €900,000.

After legal proceedings lasting more than 6 years, the Milan Court rejected the claim. First, the judge found that the Comune had failed to show the extent of the damage caused by the loss. No condition report was available showing the condition of the sculpture when it left Milan or it arrived at the Belgian museum. There was evidence that cracks and other defects had been developing on the surface of the sculpture before the incident at the Belgian museum. Moreover, the sculpture was exhibited publicly on more than one occasion after it was damaged in Brussels and before it was restored, suggesting that the damage caused by the incident was not as significant as the Comune had alleged. The sculpture was clearly not unfit for exhibition after it was damaged.

The Court went on to find that as the sculpture was the property of the Comune, as a matter of Italian law it was out of commerce and it could not be sold. Accordingly, even if there had been a loss in value, that loss could not be calculated by reference to the sculpture’s market value because being out of commerce, it had no market value. It is worth noting that the Comune originally made an insurance claim in the sum of €287,520 (which was rejected by the insurers who offered to pay €3,000), to then raise its claim to €4,354,085.06, finally settling on €900,000. The Court found that the Comune had failed to adduce evidence of the costs of restoration, and had not shown a diminution in value on its balance sheet, accordingly its claim to damages failed.